CP92 Notice: The IRS Levied Your State Tax Refund, and You Can Ask for a Hearing

What a CP92 says

The IRS CP92 page says, “We levied your state tax refund for unpaid taxes and are informing you of your right to a Collection Due Process hearing.” A levy means the IRS takes money or property to pay a tax debt. Here the money came from your state refund, not your federal one.

The notice comes from the IRS State Income Tax Levy Program. IRM 5.19.9.3.4 says the IRS sends it by certified mail with Publication 594, Publication 1660, Form 12153 and a return envelope.

By the time you read the notice, the IRS already has the money. IRM 5.19.9.3.5 says the IRS applies the levy proceeds to your account “prior to issuance of the CP 92.” The money goes to the earliest tax period on the levy first, and any extra moves to your other balances.

Why the hearing notice came after the levy

Most levies need a hearing notice first. State refunds are an exception. Treas. Reg. 301.6330-1(a)(2)(i) says section 6330(f) “does not require” that notice before a levy on a state tax refund. Instead, the IRS must give you the hearing right “within a reasonable time after the levy has occurred.”

You get one hearing notice per tax period. IRM 5.19.9.3.4 says that if the IRS already sent a hearing notice for a period on this levy, it sends no new one for that period, unless it assessed more tax after the earlier notice.

The program runs every year. IRM 5.19.9.3.1 says the levy entry posts annually to each tax period in the program, so an unpaid balance can reach next year’s state refund too. Treas. Reg. 301.6330-1 A-G3 says section 6330 does “not apply when the IRS levies” a state tax refund for a period on the CDP Notice, so the law does not make the IRS hold that refund during a hearing. IRM 5.19.9.3.2 lists what keeps an account out of the program, including an approved installment agreement, a pending or approved offer in compromise, and a CDP request “not yet assigned to Appeals.”

How to ask for the hearing

The CP92 page says to use Form 12153, Request for a Collection Due Process or Equivalent Hearing. Send it with the Document Upload Tool and the access code on your notice. If you can’t use the tool, mail it to the address on your notice.

Start now. Treas. Reg. 301.6330-1(c)(2) A-C3 says you must ask in writing “within the 30-day period commencing the day after the date of the CDP Notice.” Find the date on your notice and count from the next day.

If you miss that period, you can still ask for an Equivalent Hearing. A-I7 allows “the one-year period commencing the day after the date of the CDP Notice.” Appeals considers the same issues under A-I2, but A-I6 says section 6330 does not authorize an appeal of that decision, and A-I4 says the IRS does not have to suspend collection action.

The CP92 page says the hearing lets you “appeal the levy and address any other issues you may have with your tax situation.” Our CDP hearing prep tool shows your request dates and what a request needs.

What to do about the balance

The state refund may not cover the whole debt. The CP92 page says to pay what you owe, or to request a payment plan if you can’t pay in full. Call the toll-free number on your notice, or try our payment plan estimator first.

Do not let the balance sit. The page warns that an unpaid debt may keep you from getting or renewing a U.S. passport, so contact the IRS. It also points to offers in compromise and a temporary delay on collection. Our collection alternatives router compares those options.

What people mistake a CP92 for

Many people think the state kept the refund for a state debt. This debt is federal. IRM 5.19.9.3.6 says these calls often start when the state sends its own notice about the levy.

Others think the levy must be wrong because their federal refund already paid the same debt. IRM 5.19.9.3.6 says a state levy payment can take “4 to 6 weeks” to post. The IRS refunds the extra as long as you have no other balance.

The costliest mix-up is the injured spouse claim. If your spouse owes the debt and you do not, IRM 5.19.9.3.7.1 says you are not an “injured spouse” for this levy. Your remedy is a written claim for return of “wrongfully levied” property under IRC 6343(b).

A CP92 also differs from a Final Notice of Intent to Levy, which warns you before a levy. The CP92 comes after the levy.

For tax professionals

IRM 5.19.9.3.4 ties the notice to a TC 971 AC 600 paired with a TC 670 DPC 20 or 21, or with a TC 706. A TC 971 AC 069 posts when the notice generates. IRM 5.19.9.3.1 limits the program to individual master file modules.

On a joint liability, each spouse gets a separate CP92, even at the same address. IRM 5.19.9.3.4 lists exceptions for a deceased secondary taxpayer or a bad name line or SSN.

For an erroneous levy, IRM 5.19.9.3.7 says a request must come “before the expiration of 2 years” from the levy payment date. Check whether the money already went back out: the IRS cannot return a payment that created an overpayment it already refunded. A non-liable spouse carries the burden of proof under IRM 5.19.9.3.7.2.

Common Questions